ECONOMY

Sweeping bill will make it easier to provide pensions in short time

Employees at social security funds said that a sweeping draft bill on social security, unveiled by the government yesterday, was disappointing as it will not raise pensions by much. The employees’ organization also voiced doubts as to whether the funds have the necessary infrastructure to implement a new, less complex procedure for determining a retired employee’s pension, especially for those who have been insured with more than one fund over the course of their employment. The draft lead, presented by Labor Minister Dimitris Reppas and his deputy, Rovertos Spyropoulos, will be submitted to Parliament after the Christmas recess, which began late yesterday, with the vote on the budget. It deals with several subjects at once, which is to be expected for a bill being submitted a few months ahead of national elections. Among its provisions are ones allowing the self-employed to be eligible for a pension after 37 years of employment, regardless of age, and allowing them to claim a reduced pension at the age of 65 with just 3,500 days worked. The bill also takes significant steps toward providing relief to the Social Security Foundation (IKA) from debts incurred by ship-repairing companies, a sector in considerable financial straits, as well as to the journalists’ and hotel employees’ pension funds, which are suffering from considerable arrears in employer contributions. On the other hand, it is still unclear whether moving wage-earners in the agricultural sector from IKA to OGA, the farmers’ pension fund, will have any impact on the level of their pensions. It is clear, however, that this measure considerably cuts the social security contributions of food industries active in agricultural production. Those who definitely stand to lose from the bill’s provisions are civil servants, whose lump sum payments, which they receive upon retirement, are due to fall. However, most of the provisions make some steps toward addressing longstanding grievances: They allow, for example, the unemployed who are just short of the required contributions to apply for a pension; they provide better terms for people with disabilities and create a more favorable regime for settlement of arrears to IKA. The bill also provides for social security coverage for students of universities and vocational schools undergoing any sort of practical training. However, the main reason this bill was prepared was in order to simplify the procedures for estimating the pension levels of those who have been insured under more than one pension fund over the course of their working life. According to Spyropoulos, the new provisions will allow pensions earned by this specific category of employees to rise by up to 10 percent because, in the past, some of the pension funds penalized those employees, or the self-employed who moved to another pension fund by refusing, for example, to liquidate their contributions and transfer them to another fund. In any case, getting clearance by a number of funds in order to get a pension has long been a bureaucratic nightmare. Pension fund employees, however, disagreed with Spyropoulos, saying the benefit in terms of higher pensions would be 3 or, at most, 4 percent. In any case, they said, this only concerns about one in 10 pensioners. Moreover, the fund employees said, adopting the new simplified procedures demands a level of automation that simply does not yet exist at the funds. The University of the Aegean is undertaking a study on the specifics of the computer system that is to support the implementation of the new procedures.